Page 42 - RFCUNY-2010AnnualReport

At June 30, 2010, future minimum principal pay-ments are approximated as follows:

2011 $ 864,000 2012 909,000 2013 978,000 2014 1,041,000 2015 55,363,000

$59,155,000

The Loan is secured by the Property (230 West 41st Street) and assignment of rents and other pay-ments from the tenants.

The Loan is subject to certain restrictive financial covenants, including limitations on the incurrence of additional indebtedness. Management believes the LLC is in compliance with all covenants at June 30, 2010. The Loan is subject to certain prepayment pen-alties if it is repaid prior to its maturity date. Also included in restricted cash are amounts to be funded for replacements and repairs, and leasing commissions as required by the loan agreement.

The Foundation entered into an agreement with CUNY, an affiliate and a tenant in the building, to sublease 66,867 of CUNY’s 170,081 square feet of space. The CUNY lease agreement, which expires in June 2017, is at a rate of $33 per square foot with 2.5% increases effective annually. The Foundation’s sublease agree-ment has the same rate and terms. For the years ended June 30, 2010 and 2009, annual rental revenues earned from CUNY were $3,921,135, net of sublease expense of $2,535,373.

At June 30, 2010 and 2009, deposits held in cus-tody for tenant (CUNY) of $298,025 and $439,898, respectively, are noninterest-bearing and consist of amounts funded by CUNY to be used for their lease-hold improvements.

In fiscal years 2010 and 2009, the Foundation approved grants to CUNY for central research initia-tives of $2,300,000 annually.

Grants Plus provides administrative services with respect to grants and contracts received by several not-for-profit organizations. Those grants and con-tracts administered by Grants Plus, as agent for the not-for-profit organizations, in fiscal years 2010 and 2009 approximated $1,603,000 and $1,263,000, respectively.

The Foundation paid the operating costs of Grants Plus, which totaled $76,997 in 2010 and $431,926 in 2009. These costs are reflected as donated services

In July 2004, the LLC entered into a management agreement with GVA Williams (now Colliers Interna tional) to manage and provide leasing services to the Property for one year, at which time it was automati-cally renewed on a month-to-month basis until termi-nated by either party giving prior written notice of termination. The agreement provides that the LLC will pay a management fee of $70,800 per year for years one through three and $73,200 per year for years four through six. Such expenses are included in operating expenses in the consolidated statements of activities. Additionally, the LLC will pay the property manager a commission in accordance with the terms of the man-agement agreement if the property manager procures a new lease or an extension, renewal, or expansion of an existing lease for space in the Property during the term of this agreement.

In March 2006, the Foundation established a revolving credit loan facility of $12 million, which bears interest at LIBOR plus 1.75%, and which converted to a 10-year term loan in September 2006. The loan was obtained for CUNY’s benefit to finance the construc-tion of certain leasehold improvements for leased space at 230 West 41st Street. CUNY entered into a guaranty with the bank to facilitate the loan. Conse quently, the loan agreement between the Foundation and CUNY specifies that all loan proceeds and related expenses incurred by the Foundation shall be paid by CUNY. During fiscal years 2010 and 2009, the Foun dation received from CUNY $91,240 and $90,371, respectively, for payment of interest expense. The remaining balance on the loan due from CUNY and the interest expense associated with it is fully paid as of June 30, 2010.